The Development Bank of South Africa (DBSA) and the Eastern Cape government announced earlier this month that it had agreed “in principle” to provide R100 million for the development of the province’s first automotive cluster.

The logistics and light industrial assembly plant is being managed by the Automobile Industry Development Centre (AIDC) and will be built near Volkswagen in Uitenhage.

The construction of the complex on a 42 ha site is expected to start after an environmental impact assessment study has been conducted. Public notification of this study has been done.

The AIDC says that the project is moving to the pre-development phase because the completion of a favourable feasibility study undertaken is now complete.

AIDC project manager Lance Schultz adds that discussions with component manufacturers and other potential tenants indicate strong interest in the park.

He says that supplier parks internationally are traditionally positioned around original equipment manufacturers to provide service on a just-in-sequence and just-in-time basis and that major benefits of this arrangement include logistical synergies and economies of scale with manufacturers. Benefits include improve communication as well as enhanced quality, cost and delivery controls.

The park is expected to play a significant role in contributing to the competitiveness of the South African automobile sector as well as creating jobs in Uitenhage and stimulating the region’s economy.